Schumpeterian Growth

Schumpeterian growth is an economic theory named after the 20th century Austrian economist Joseph Schumpeter. Unlike other economic growth theories, his approach explains growth by innovation and entrepreneurial spirit.

Schumpeterian Growth Policy stands on the policy of "Creative Destruction". The process serves the basic need of the Capitalist- desire to accumulate surplus value. This growth policy both strategizes and mandatorize the need for technological innovation for the survival and expansion of the Capitalist Class. The Policy has its two realms- Creation and Destruction. Creation gathers creative energies of Human capital to create new innovative methods to produce goods and also enable them with certain specifications and qualitative attributes which render them superior to their counterparts. Creation develops interest of the market in latest products designed with latest technology and production technique and enabled with better features. This "creation" thus works as a market driver for the Capitalist, who is now the sole supplier of this new product.

The "destruction" consolidates the monopolist desire of the Capitalist- his desire to succeed at the cost of others while capturing others share also. The new creative energies tends to beat out previous methods and know-how and make them obsolete. The process leads to destruction of previous methods. This temporary creation of a "monopoly market" promises maximum gains to the capitalist class and thus becomes a prime imperative for them to invest in R&D.

The above growth policy is good from top bourgeoisie point. However, when a holistic view is taken, the Schumpetarian growth strategy drives away common players. The growth gets limited to the elites and trickle-down to commons remains downsized. - Snigdh Bharadwaj

Read more about Schumpeterian Growth:  Literature

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